Pulp It

Thoughts from Bernard Lax

Make Money at Work….for Doing Nothing

When was the last time that an estimator included the costs associated with employees doing nothing? It is odd that nobody has thought to add this as a line item when budgeting a job, but clearly it should be included in the cost analysis of a construction project. By now you must be wondering, what am I talking about?

Think about it. A subcontractor takes a job building a tenant space in a high rise. You would think the landlord of that building would be thrilled to accommodate the tenant in their improvements. In fact they are so thrilled they allocate just ONE elevator in the building for all the trades to use to get both manpower and materials up and down to the jobsite.

Have you ever been on one of these sites? If not, what you will see are tradesman standing around at an average rate of $100 an hour waiting and waiting for sometimes up to a half hour at a time for an elevator to get them and their materials where they need to go. You can almost say they are just standing around for a living. Multiply this occurrence by a few times a day times for every guy on the job and you will start to see the dollars add up day after day for workers doing nothing.

This became even more apparent as I have visited a couple construction sites recently that have imposed such high security and restrictive access to their sites that their construction costs have risen as a result. Imagine a 10% to 20% to their overall labor costs on a project while employees of subs wasting time complying with over bearing site regulations. The result is that the client is paying these additional costs and getting nothing in return for it.

The lesson to the sub contractor is that bidding a project without putting in the “doing nothing” factor is a sure result in diminishing your profits.

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